Joint Versus Individual Incentives

Ciosa Garrahan and Juliet Hodges

on 24 July, 2014 at 10:07

It’s no secret that creating incentives is one of the most popular tools for trying to change behavior. But how about trying to change the behavior of not just an individual, but a large group of people? It may seem as though it would be harder to change the behavior of a group of people rather than just a single person, but that may not be accurate. A new study this month by the Behavioral Insights Team (BIT) showed that group incentives were more effective than individual incentives.

Within a school setting, the research team split students into three sections: a control condition, an individual incentive section, and a group incentive section. The goal was to use an incentive to improve grades amongst students.

Those in the individual incentive group were told that they would receive a 20% grade increase, only if they passed the exam and had a perfect attendance rate for that week. The same was told to students in the group incentive, but with an added twist; they would only receive the 20% increase if all students in the group passed the exam and had perfect attendance.

Results showed that, on average, those in the group incentive section scored higher on their mid-terms compared to the control group. The researchers noted that this occurred due to peer monitoring, and that peer effects can be very influential particularly at this age group. The incentive also had spill-over effects, as these students also scored higher on their homework and midterm exams in other courses.

The individual incentive section showed no change in grades or attendance. While studies are ongoing in regards to this topic, BIT’s finding that group incentives resulted in higher performance could have major implications. Brands, for one, would be hard-pressed to ignore the potential effects that could be prevalent when creating incentives for a large group.

Ciosa is a choice architect at #ogilvychange, London. She has spent 7 years studying behavioural science from Trinity College Dublin (TCD) and University College London (UCL) and is now focused on applying this knowledge in the field of behaviour change.

Juliet is a choice architect at #ogilvychange, London. She is one of the first members of the team, joining after completing her masters in behavioural economics at Warwick, with a previous background in psychology at the University of York.